Traditional, Command, & Market
Teachers:
The following pages have the vocabulary words that the students should familiar
with regarding the economic systems. I also included some blank ones to make
your own.
IDEAS:
1. Print these words out and stick them on your Word Wall.
2. Give each student a set & have them write definitions & symbols on the back.
3. Use the cards to study—play review games with the cards!
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Print & cut out to post on Word Wall OR to use as study cards!
Print & cut out to post on Word Wall OR to use as study cards!
A blank template in case you’d like to add more words!
Teachers:
Have students create a three-flap foldable for the different economic systems.
*Some teachers like to include Mixed; however, I do not since technically it is
not a type of economic system. It’s up to you!
Students should write the definition, examples, symbol, etc. in each flap.
You can print off the following pages and use as posters around the room, or
project each page and discuss it.
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Scarcity is the Root of Economics
• There is not a single country in the world that has an abundance of all the
resources that its people need/want.
•Scarcity = the limited supply of something
• Because of this, countries must make a plan of how to use these limited
resources.
• This “plan” is called an…
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Economic System!
Three Little Questions
• When developing the economic plan, each country must ask three basic economic questions:
1. What goods/services will be produced?
2. How will goods/services be produced?
3. Who will consume the goods/services?
The way a country answers these questions determines what kind of economic system it will
have:
Traditional
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Command
Market
Traditional Economy
• All economic decisions are based on customs, traditions, & beliefs of the past.
•People will make what they always made & do the same things their parents did.
•The exchange of goods is done through bartering.
•Bartering = trading without using money
•Some Examples: villages in Africa & South America, the Inuit in Canada,
Aborigines in Australia
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Traditional Economy
Let’s see how a traditional economy fits in with the 3 economic questions…
1. What goods/services will be produced?
• People follow tradition & make what their ancestors made.
2. How will goods/services be produced?
• People produce goods the same way that their ancestors did.
3. Who will consume the goods/services?
• People in the village who need them.
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Command Economy
• All economic decisions are made by the Government.
•The government owns most of the property, sets the prices of goods,
determines the wages of workers, plans what will be made…everything.
•This system has not been very successful. More and more countries
are abandoning it.
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Command Economy
• This system is very harsh to live under; because of this, there are no
PURE command countries in the world today.
•Some countries are close: Cuba, former Soviet Union, North Korea,
former East Germany, etc.
•All of these countries have the same type of government: Communist!
The government is in control of everything.
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Command Economy
Let’s see how a command economy fits in with the 3 economic questions…
1. What goods/services will be produced?
• Government decides what will be produced.
2. How will goods/services be produced?
• Government decides how to make them.
3. Who will consume the goods/services?
• Whoever the government decides to give them to.
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Market Economy
• Economic decisions are made based on the changes in prices that occur as
buyers & sellers interact in the market place.
•Free enterprise helps make these decisions.
•Free Enterprise = competition between companies (shifts prices of
goods/services)
• The government has no control over the economy; private citizens answer
all economic questions.
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Market Economy
Let’s see how a market economy fits in with the 3 economic questions…
1. What goods/services will be produced?
• Businesses (owned by private citizens) based decisions on supply &
demand and free enterprise. (AKA $!)
2. How will goods/services be produced?
• Businesses (owned by private citizens)
3. Who will consume the goods/services?
• Consumers
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Market Economy
• In a truly free market economy, the government would not be involved at
all. Scary…
•There would be no laws to make sure goods/services were safe.
*Food! Medicine!
•There would be no laws to protect workers from unfair bosses.
•Because of this, there are no PURE market economies, but some countries
are closer than others.
• Some Examples: US, UK, Australia, etc.
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Hmmmm . . .
•Since there are no countries that are purely command or purely market,
what does that make them? Comket? Markmand?
•Ha! Most democratic countries have some characteristics of both systems, so
we keep it simple and call them:
•Of course, most countries’ economies are closer to one type of system than
Mixed!
another…
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The Economic Continuum
Command
Cuba
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Market
Russia
Germany
UK US
Australia
Teachers:
• Print off the following page for each student. Students will
write down how each economic system answers the 3 basic
economic questions.
*This can be used as a review, or the students can fill it in
while discussing the notes.
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Traditional
1. What goods/services
will be produced?
2. How will
goods/services be
produced?
3. Who will consume the
goods/services?
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Command
Market
Teachers:
• Print off the cards on the following page and glue them back to
back.
• Project the following “Show Me” statements and have the students
hold up the correct end of the card.
• There is also a blank template for you to add additional questions
if you’d like. *Or have the students write one of their own!
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Show ME!
The government makes ALL
economic decisions.
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Answer
Command
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Show ME!
If your parents were peanut
farmers, then you would be a
peanut farmer also.
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Answer
Traditional
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Show ME!
Most democratic countries are
this.
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Answer
Mixed
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Show ME!
Cuba and
North Korea
are close to having this type
of system.
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Answer
Command
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Show ME!
Businesses (run by private citizens)
determine what goods/services are
produced and how they will be made.
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Answer
Market
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Show ME!
Bartering is used.
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Answer
Traditional
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Show ME!
Communist countries are
closely related to this.
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Answer
Command
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Show ME!
Businesses make economic
decisions, but the government
regulates them to make sure they’re
safe/fair.
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Answer
Mixed
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Show ME!
Australia is close to this.
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Answer
Market
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Show ME!
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Teachers:
• Have the students answer the following questions
on their own paper (or on white boards) to check for
understanding.*This could also be used as a quiz
grade!
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Let’s Review
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
What are the three basic questions that every economic system must answer?
What are the three economic systems?
The former Soviet Union was an example of what kind of economic system?
Which economic system allows for the most individual freedom?
In which economic system does the government have the most control?
In which economic system do individuals do things based on customs & beliefs?
What is the economic system of most communist countries?
How do traditional economies exchange goods?
Which country is closest to a true Market economy?
Most democratic countries have which type of economic system?
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Answers
1. What are the three basic questions that every economic system must answer? What’s produced, how’s it
produced, & who consumes it
2. What are the three economic systems? Traditional, Command, Market
3. The former Soviet Union was an example of what kind of economic system? Command
4. Which economic system allows for the most individual freedom? Market
5. In which economic system does the government have the most control? Command
6. In which economic system do individuals do things based on customs & beliefs? Traditional
7. What is the economic system of most communist countries? Command
8. How do traditional economies exchange goods? Bartering
9. Which country is closest to a true Market economy? Australia
10. Most democratic countries have which type of economic system? Mixed
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Teachers
• Have the students respond to the opinion
prompt on their own paper. This could also be
used as a quiz grade!
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In My Opinion…
Which economic system do you think is best?
Write a paragraph to defend your answer. Make
sure that you give specific details as to why you
chose this economic system.
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Teachers
• Put the students into groups and give each group a card (next
page) with vocabulary words on it. The groups will create a role play
to present to the class, using their vocabulary words and what they’ve
learned about the economic systems.
•It’s okay to give more than one group the same words, as their role
plays all turn out different!
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Role Play Terms
•Bartering, traditional economy,
customs/beliefs, ancestors, past
•Market economy, free enterprise, businesses make
what they want & how they want it
•Command economy, strict government, no
individual choice for what to make/buy
•Mixed economy, democracy, private citizens have
own business & government regulates them
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Role Plays
• Look at your group’s vocabulary words.
• Develop a skit that shows the term “in action”. This means, don’t
just define the word—you have to act out how it works in a real world
situation.
• You will act out your role play in front of the class, so make sure
that you really understand what the words mean!
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Teachers
• The following activity is a review mini-book project. I suggest reading
aloud The Important Book by Margaret Wise Brown before completing the
activity. This book is a short children’s book that shows students how to
find the most important point. Plus, even big kids like being read to! 
•You can still do this activity without reading the book.
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Important Book
You are going to create an Important Book about
Economic Systems based on The Important Book by
Margaret Wise Brown.
Each page will have THE MOST IMPORTANT
THING TO KNOW about the system, followed by
2-3 additional facts.
SYSTEM NAME
The important thing about (System) is…
--1st fact
--2nd fact
--3rd fact
Illustrate & Color your book. Don’t forget a cover
Follow this format
page!
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But the most important thing about (System)
is (write the most important thing to know).
Teachers
• Print out the following page (two-per-page) and have students
complete the Ticket Out the Door at the end of class. I like to read
over what they write and address any “issues” the following day.
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Ticket Out the Door: Write down 3 of the most important
things that you learned from today’s lesson.
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Ticket Out the Door: Write down 3 of the most important
things that you learned from today’s lesson.
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Thank you so much for downloading this file. I sincerely hope you find it helpful and that your students learn a lot from it! I look
forward to reading your feedback in my store.
If you like this file, you might want to check out some of my other products that teach in creative, engaging, and hands-on ways.
Best of luck to you this school year,
Ansley at Brain Wrinkles
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Ansley at Brain Wrinkles
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